When you signed on the dotted line for your new auto, it seemed
like you were on top of the world. You went shopping at the
right time, and felt like you got a steal on the price. And
then, the insurance bill came in the mail and the bottom on your
perfect little world dropped out. What happened?
People buying a new auto for the first time may not realize
this, but the bank will require them to keep full coverage on
their car for the length of the loan. Now, you can get away with
only liability coverage when you don't finance a car - but
things work a lot differently when the banks get involved, don't
they? You might even think that there is some sort of conspiracy
going on involving the banks and insurance companies. While it
is a good theory, the truth is that banks need to be sure that
they will get their money, so they require full coverage
insurance on a new auto. After all, who would continue making
payments if the car were all smashed up because of an accident?
But why are these rates so high?
A lot of factors are involved in determining insurance rates on
a new auto. The age of the driver, his driving record, the
number of accidents on his record, and even where he lives - all
these are factored into the rate. Because the costs of repairing
a new auto are so high, insurance companies have to charge steep
rates to recover their losses in the event of a wreck.
Isn't there anything I can do to lower these rates?
Auto insurance on newer vehicles will be steep, but there are
things you can do to get lower rates. One of the best ways to
save money is to shop around. While all insurance companies use
statistics to set their rates, they do not all interpret these
statistics the same way. Never, ever insure your new auto with
the first company you call!
You can also raise the deductible you will pay in the event that
you wreck your new auto, and in return receive lower rates. The
higher the deductible, the lower the auto insurance premiums for
your new car will be.
Come on, what else can I do? These rates are killing me!
All right, let's start with the obvious: Slow down. Don't drive
your new auto like some Nascar speed demon! Tickets and moving
infractions will definitely increase the rates for your new auto
insurance. You can also try driving less, because insurance
companies consider it to be less of a risk when people drive
fewer miles with their new auto. Plus, this may increase your
resale value down the road, when it is time to buy another new
auto.
Insurance rates on a new auto, or an old one, are greatly
affected by where you live. If the rates truly bother you,
consider moving to some less populated area with a low crime
rate. Buy an alarm for you new auto, and be sure to keep it in a
garage when you sleep at night.
Is that it?
Well, there's no guarantee that the insurance rates on your new
auto will ever be great, but you can also try improving your
credit score. Insurance companies see a correlation between
credit score and driving habits, so they tend to give better
rates to people with better credit. But in the end, insurance
for your new auto will be significantly higher than the
liability coverage you had when you were driving that "beater"
that got you through college. Hey, that's just part of the price
you pay for driving a new auto. There are definitely ways to
improve those rates, but you'll need to get used to the fact
that the good old days of "liability only" coverage are behind
you.
About the author:
Albert Medinas has developed and maintains the website
New Auto Junction,
which answers the most common questions people have about
purchasing a
New Auto. Please visit us at
http://www.newautojunction.com today.
